Correlation Between SFS REAL and UPDC PLC

Can any of the company-specific risk be diversified away by investing in both SFS REAL and UPDC PLC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SFS REAL and UPDC PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SFS REAL ESTATE and UPDC PLC, you can compare the effects of market volatilities on SFS REAL and UPDC PLC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SFS REAL with a short position of UPDC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFS REAL and UPDC PLC.

Diversification Opportunities for SFS REAL and UPDC PLC

0.25

Correlation Coefficient

SFS REAL  UPDC PLC

Modest diversification

The 3 months correlation between SFS and UPDC is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding SFS REAL ESTATE and UPDC PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPDC PLC and SFS REAL is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SFS REAL ESTATE are associated (or correlated) with UPDC PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UPDC PLC has no effect on the direction of SFS REAL i.e., SFS REAL and UPDC PLC go up and down completely randomly.

Pair Corralation between SFS REAL and UPDC PLC

Assuming the 90 days trading horizon SFS REAL is expected to generate 1.12 times less return on investment than UPDC PLC. But when comparing it to its historical volatility, SFS REAL ESTATE is 2.09 times less risky than UPDC PLC. It trades about 0.28 of its potential returns per unit of risk. UPDC PLC is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  436.00  in UPDC PLC on July 8, 2025 and sell it today you would earn a total of  224.00  from holding UPDC PLC or generate 51.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SFS REAL ESTATE  vs.  UPDC PLC

SFS REAL ESTATE

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SFS REAL ESTATE are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, SFS REAL unveiled solid returns over the last few months and may actually be approaching a breakup point.

UPDC PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UPDC PLC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, UPDC PLC displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SFS REAL and UPDC PLC

The main advantage of trading using opposite SFS REAL and UPDC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFS REAL position performs unexpectedly, UPDC PLC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in UPDC PLC will offset losses from the drop in UPDC PLC's long position.

The idea behind SFS REAL ESTATE and UPDC PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.